Wednesday, November 7, 2012

FIFA investigates Bin Hammam’s financial management of AFC

World soccer body FIFA has expanded investigation of its
suspended vice president, Mohammed Bin Hammam, to include his financial
management of the Asian Football Confederation (AFC) in a move that involves
questions raised by alleged payments to the Qatari national by a shareholder of
a Singapore-based company in advance of the signing of a $1 billion marketing
rights agreement, according to sources close to FIFA and press reports.

The sources said that independent FIFA ethics investigator
Michael J. Garcia was now in possession of the AFC’s file regarding potential
irregularities in the financial management of the Asian soccer body. Mr. Bin
Hammam, who is the subject of three inquiries, has also been suspended as
president of the Asian group pending investigation by FIFA, the AFC and
Malaysian police. The controversy over Mr. Bin Hammam has deeply divided the
AFC with supporters of the Qatari working to dampen the impact of the moves
against him.

The AFC file significantly expands Mr. Garcia’s inquiry into
last year’s alleged attempt by Mr. Bin Hammam to buy the support of Caribbean
soccer officials for his failed effort to defeat Sepp Blatter in FIFA’s
presidential elections, the sources and press reports said. Mr. Bin Hammam,
once one of the most powerful men in Asian soccer who is at the center of the
worst scandal in the history of world football, has repeatedly denied any
wrongdoing. He charges that the allegations against him were construed to
penalize him for challenging Mr. Blatter’s presidency.

Mr. Garcia declined to comment referring to FIFA’s code of
ethics.

The expansion of the FIFA investigation is believed to be
one reason why the Swiss-based Court of Arbitration for Sport (CAS) last week
rejected Mr. Bin Hammam’s request that his suspension as FIFA vice president be
overturned. The CAS ruling was first reported by FIFA.

FIFA last month extended its 90-day banning of Mr. Bin
Hammam by another 45 days. FIFA had earlier unsuccessfully attempted to
introduce an internal AFC audit of Mr. Bin Hammam’s financial management of the
Asian body conducted by PricewaterhouseCoopers (PwC) into another CAS appeal by
the Qatari national against FIFA’s actions against him.

The PwC report, the sources said, was believed to be part of
the file in Mr. Garcia’s possession. The report charged that Mr. Bin Hammam had
used an AFC sundry account as his personal account and questioned the terms and
negotiation procedure of a $1 billion master rights agreement (MRA) with Singapore-based
World Sports Group (WSG). The PwC report also raised questions about two
payments totalling $14 million by a WSG shareholder to Mr. Bin Hammam’s AFC
sundry account prior to the signing of the agreement.

The report said that “it is highly unusual for funds
(especially in the amounts detailed here) that appear to be for the benefit of
Mr Hammam personally, to be deposited to an organization’s bank account. In
view of the recent allegations that have surrounded Mr Hammam, it is our view
that there is significant risk that…the AFC may have been used as a vehicle to
launder funds and that the funds have been credited to the former President for
an improper purpose (Money Laundering risk)” or that “the AFC may have been used
as a vehicle to launder the receipt and payment of bribes.”

Mr. Bin Hammam reportedly furnished FIFA investigators in
September with his own independent expert's report from London accountants
Smith and Williamson into the AFC account that was said to include a
line-by-line explanation of all expenditure.

Malaysian police arrested in September the husband of a
former AFC head of finance and an associate of Mr. Bin Hammam on suspicion of
helping steal documents related to one of the payments by the WSG shareholder
to Mr. Bin Hammam from AFC’s head office in Kuala Lumpur.

WSG has so far not commented publicly on the PwC report or
its relationship or that of its shareholder with Mr. Bin Hammam. However in an
August 28, 2012 letter to this reporter that threatened legal action, WSG Group
Legal Advisor Stephanie McManus asserted that “PWC are incorrect and
misconceived in suggesting that the MRA (master rights agreement) was
undervalued. They have neither considered the terms of the contract correctly,
the market, nor the circumstances in which it was negotiated,” Ms. McManus
wrote.

WSG has since asked the Singapore court to instruct this
reporter to reveal his sources for all his WSG-related reporting. The Singapore
High Court is scheduled to decide on November 19 on an appeal by this reporter
against a decision by a lower court that instructed him to reveal his sources
for his reporting on the PwC report as well as Mr. Bin Hammam’s relationship to
the company.

In an affidavit to the lower court, Mr. Dorsey asserted that
he believed that WSG’s legal action was an attempt at “indirectly discovering
who within the AFC may have breached their confidentiality and also suppress
any well meaning or good intended person from coming forward in the future and
is seeking to punitively punish those who may have spoken against them.”

Acting AFC president Zhang Jilong last month accused the
Qatari national and his lawyer, Eugene Gulland, of similar methods, charging
that they had adopted “intimidatory tactics” against members of the Asian
body’s executive committee and staff. Messrs. Bin Hammam and Gulland have
denied the charge.

WSG’s legal action and its refusal to comment publicly on
the PwC report, including the allegation of eyebrow raising payments by one of
its shareholders, appear to stem from concern that the terms of or
circumstances under which its $1 billion agreement with the AFC was negotiated
may become known beyond a very small circle of people. Not all members of the
executive committee, the AFC’s highest management body, have seen the agreement
and those that have were only allowed to view it on the premises of the Asian
soccer body, according to sources close to the AFC.

The sources said the restrictive handling of the WSG
contract contrasted with the way marketing agreements concluded by European
soccer body UEFA and other international sports associations are dealt with. A
spokesperson for UEFA said both its managerial staff and executives had access
to the group’s contracts irrespective of where they physically may be at any
given moment.

James M. Dorsey is a senior fellow at the S. Rajaratnam
School of International Studies at Nanyang Technological University in
Singapore and the author of the blog, The Turbulent World of Middle East
Soccer.

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James M DorseyWelcome to The Turbulent World of Middle East Soccer by James M. Dorsey, a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies. Soccer in the Middle East and North Africa is played as much on as off the pitch. Stadiums are a symbol of the battle for political freedom; economic opportunity; ethnic, religious and national identity; and gender rights. Alongside the mosque, the stadium was until the Arab revolt erupted in late 2010 the only alternative public space for venting pent-up anger and frustration. It was the training ground in countries like Egypt and Tunisia where militant fans prepared for a day in which their organization and street battle experience would serve them in the showdown with autocratic rulers. Soccer has its own unique thrill – a high-stakes game of cat and mouse between militants and security forces and a struggle for a trophy grander than the FIFA World Cup: the future of a region. This blog explores the role of soccer at a time of transition from autocratic rule to a more open society. It also features James’s daily political comment on the region’s developments. Contact: incoherentblog@gmail.comView my complete profile